With the passage of Proposition 206, many Arizona employees will be getting a raise and paid sick leave. The new law, known as the “Fair Wages and Healthy Families Act” (the Act), increases Arizona’s minimum wage from its current $8.05/hour to $10.00/hour, effective January 1, 2017. For the following 3 years, the minimum wage will increase by specified amounts, capping out at $12.00/hour on January 1, 2020. Beginning January 1, 2021, the minimum wage will increase annually based on cost living as measured by the consumer price index.

As of July 1, 2017, Arizona employers must provide all employees with paid sick leave. Employers with fewer than 15 employees must provide employees with 1 hour of paid sick leave for every 30 hours worked, up to 24 hours per year. Employers with 15 or more employees must provide 1 hour of paid sick leave for every 30 hours worked, up to 40 hours a year. The Act broadly defines the reasons employees may use sick leave and contains multiple rules regarding the accrual, taking and administration of paid sick leave. Employers are required to post a notice in the workplace that outlines employees’ rights under the Act. The Arizona Industrial Commission will soon publish a model notice.

What to do? Audit your workforce to determine who will be entitled to a wage increase on January 1, 2017. Review your current sick leave or PTO policy to ensure the policy meets the requirements of the Act. If not, the policy should be amended before July 1, 2017. We are available to answer any questions you may have and/or assist with revising your policies and procedures to address the Act’s requirements.